The Iowa Educational Excellence Act and its amendments provide for four types of Phase III programs: performance-based pay, supplemental pay, a combination of both, or comprehensive school transformation. In 1993, the Des Moines Phase III program, which originated as a combination of performance-based pay and supplemental pay, changed to a comprehensive school-transformation program. The first 6 years emphasized the enhancement of organizational development through professional-development programs for teachers. Since 1993, the Des Moines program has focused on building the capacity of both professional staff and the school organization to better meet students' needs. This document describes the history of the Des Moines program, its objectives, current activities, process evaluation, and product evaluation. Phase III programs focus on school improvement through school-based management and shared decision making. Phase III revenues support the use of research in planning efforts; training that builds professional and organizational capacity; evaluation techniques to determine program quality; and collaboration with diverse groups of stakeholders. Seven tables and four graphs are included. (LMI)